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Recently I have been worrying about my professional future in academia. Permanent positions are scarce and the situation is even harder when taking into account personal constrains, such as family, preference for living in a particular city, ... Therefore, I have spent some time thinking about alternative futures for academic research. For context, as I understand that answers to this question are very likely to be field and location dependent, I do theoretical research and I am based in Europe.

Nowadays, the salary and funding of many researchers is be provided by regional, national or european grants (i.e. external to your employing institution). However, grants often require the support of the hosting institution as part of the application process. Therefore, my question is: what constitutes a scientific institution? Is there anything preventing researchers from founding new research institutions located anywhere, providing them with the flexibility of working in their desired location and still enabling them to get their research and funding from external grants?

I am not arguing towards this as a model for future academic research. I understand that there are several benefits to the current model and that, for instance, social and scientific interactions would be strongly affected by such an alternative. At the same time I understand that such a proposal has several drawbacks, including the lack of support and specialised equipment that is provided by large institutions (which would make it viable for only a few fields, not requiring either of these), or the risk inherent from having a livelihood that is dependent on applying and getting grants. Nevertheless, I am still curious about what is institutionally required to consider a newly formed organisation a proper scientific institution.

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    I believe your question is imprecise. You actually want to know how funding agencies define institutions that can apply for grants. And the answer to that is that it depends on the funding agency and often even on the funding program. However, the criteria are usually published by the funding agency and you can even ask them if your institution would qualify.
    – user9482
    Aug 24, 2023 at 10:37
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    I think the idea behind grants requiring a hosting scientific institution is precisely to have an organisation around the grant applicant that can and will support them. If you say the host institution is just me and my organisation this completely defeats the purpose of having a host institution in the first place,
    – quarague
    Aug 24, 2023 at 11:50
  • Your text needs editing. What do you want.
    – user107013
    Aug 24, 2023 at 14:30

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Is there anything preventing researchers from founding new research institutions located anywhere, providing them with the flexibility of working in their desired location and still enabling them to get their research and funding from external grants?

tl;dr: Yes.

Let's take as an example the US National Science Foundation. PAPPG I.E, "Who May Submit Proposals", lists:

(a) Institutions of Higher Education (IHEs) — Two- and four-year IHEs (including community colleges) accredited in, and having a campus located in the U.S., acting on behalf of their faculty members. [...]

(b) Non-profit, Non-academic Organizations — Independent museums, observatories, research laboratories, professional societies, and similar organizations located in the U.S. that are directly associated with educational or research activities.

(c) Tribal Governments [...]

as well as, when specifically stated as eligible for a program: for-profit organizations, state and local governments, and foreign organizations ("rarely").

You'd presumably be trying to qualify under (b). There isn't any more specific definition as far as I can tell, so it'd be up to you to convince the agency officials that your organization falls in this category. But the examples given suggest that they have in mind firmly established institutions.

Moreover, there is an explicit provision that "unaffiliated individuals" are not eligible. So you'd also have to convince them that your organization isn't just a shell for an unaffiliated individual, which in fact is exactly what you are trying to create. It'd probably be rather obvious that it is, if for instance the organization has only one employee (you).

Supposing that you manage to clear that hurdle, the next one is 2 CFR 200 which gives criteria for federal grants. 200.206 lists risks that the granting agency must evaluate:

(i) Financial stability. Financial stability;

(ii) Management systems and standards. Quality of management systems and ability to meet the management standards prescribed in this part;

(iii) History of performance. The applicant's record in managing Federal awards, if it is a prior recipient of Federal awards, including timeliness of compliance with applicable reporting requirements, conformance to the terms and conditions of previous Federal awards, and if applicable, the extent to which any previously awarded amounts will be expended prior to future awards;

(iv) Audit reports and findings. Reports and findings from audits performed under subpart F of this part or the reports and findings of any other available audits; and

(v) Ability to effectively implement requirements. The applicant's ability to effectively implement statutory, regulatory, or other requirements imposed on non-Federal entities.

You would not score well on these compared to a large, established institution.

As to the proposal itself, the NSF Merit Review Principles include:

Are there adequate resources available to the PI (either at the home organization or through collaborations) to carry out the proposed activities?

"Resources" includes not only things like scientific equipment, but also basic stuff like office space, IT services, accounting, human resources management, compliance staff, legal support, etc. For established institutions, it's usually taken for granted that they can reliably provide these, but your shell institution would not find it so easy to assure them of this.

If you did receive an award, you'd be responsible for complying with 2 CFR 200 Subpart D, Post Federal Award Requirements. 200.302 in particular requires your organization to have a fairly elaborate financial management infrastructure. 200.303 requires internal controls, which you probably don't have if the only person supervising your activities is you.

So in short: No, you can't feasibly set up on your own an organization that would be eligible to receive federal grants, reasonably competitive in applying for them, and able to properly administer them if received.

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  • Really appreciate your spreading the word on restrictions that come from Uniform Guidance. A lot of folks don't realize where the "university" policies come from -- they are regurgitating federal laws and regulations. In the US, there is actually a group of "extra special" institutions that have incredibly rigorous internal controls, which means they get extra leeway from the government. PIs generally don't realize this. If you move from an FDP school to a non-FDP school, your privileges change (it's a big gap). For more on FDP: fdpclearinghouse.org Aug 24, 2023 at 16:35
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    The Ronin Institute claims to have solved many of the problems you mention. ronininstitute.org/resources/grants-management Aug 25, 2023 at 1:23
  • @AnonymousPhysicist I always laugh when PIs want a lower IDC rate. Yes, sure. Do it on your own with no institution behind you, and then there is 0 IDC! Would you like lights, heating, any help at all putting together a 150 page cost proposal? This stuff costs money, hence an IDC rate. The best institutions have rates over 50% because of all the stuff they offer to set you up. It's not trivial by any stretch, and yet it's a frequent point of frustration with PIs. I can't imagine what this place offers for resources without an IDC rate. My institution's is high, but it pays off for the PI. Aug 26, 2023 at 4:43
  • @yourfriendlyresearchadmin Most researchers make use of indirect costs. However, those who do field work have considerably less use for them (their field location does not receive the university's services). Aug 26, 2023 at 12:02
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    @NateEldredge I do not care one bit how many grants they have received. However, it turns out NSF award search does not work but Google search works a bit better. See, for example: nsf.gov/awardsearch/… Aug 26, 2023 at 12:04

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